Promoting transparency for better pension outcomes
The GPTB focuses on the transparency and quality of public disclosures with quality relating to the completeness, clarity, information value and comparability of disclosures.
The overall country benchmark scores were derived from an equal weighting of four factors: governance and organisation; performance; costs; and responsible investing. 188 questions were asked and 14,100 individual data points were analysed.
Five elements were examined across the cost factor, with 57 questions analysed across the components of: total fund cost disclosures; asset class level disclosures; external management fee disclosures; transaction costs; and member service cost disclosures.
The assessment of governance and organization disclosures included 34 questions organised across four components: governance structure and mission; board competencies and qualifications; compensation, HR and organisation; and organisational strategy.
Performance scores were based on up to 43 questions across seven criteria: total fund (or investment option) returns and value added; asset class returns and value added; clarity and quality of return and benchmark disclosures; asset mix and portfolio composition disclosures; explanation of risk management policies and specific risk disclosures; explanation of key results and outlook; member service goals, plans and service level reporting; and funded status disclosure discussion of assumptions and risks.
The assessment of responsible investing disclosures included 54 questions across three key components: responsible investing framework and reporting; responsible investing governance; and responsible investing implementation.
Select a factor
Overall Results Cost.
Overall Results Governance.
Overall Results Performance.
While funds around the world do a good job of disclosing governance frameworks related to financial and investment risks, as revealed in the GPTB, but what is best practice for communicating governance around addressing large, one-off events such as the impact of COVID or war?
The transparency of pension fund disclosures has improved in the past year across the 15 countries and 75 pension funds measured in the Global Pension Transparency Benchmark, a collaboration between Top1000funds.com and CEM Benchmarking.
A minority of pension funds reviewed for the GPTB publicly disclosure their organizational strategy in a way that goes beyond disclosures of economic and market conditions and the impact on the performance of their investments. Michael Reid argues there is room for improvement in communicating key corporate activities to stakeholders.
Anne Simpson, managing investment director, board governance and sustainability tells Amanda White why transparency is so important at CalPERS and what the fund is doing to improve it.
Comprehensive, holistic value disclosures and compelling communication are key benchmarks for pension funds. This has been confirmed by the first year experience working with leading global pension funds for the Global Pension Transparency Benchmark, a collaboration between Top1000funds.com and CEM Benchmarking. In year two, in recognition of this belief and communication excellence, we have decided to award bonus points to funds preparing
The Global Pension Transparency Benchmark (GPTB) measured four factors in its assessment of transparency of pension fund disclosures, here Amanda White looks specifically at the level of cost transparency across pension funds globally.
Global Pension Transparency Benchmark advisory board member Lorelei Graye, says the benchmark combined with better data standards for incoming reporting will usher in more constructive transparency.
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CEM Benchmarking is an independent provider of cost and performance benchmarking information for pension funds and other institutional asset owners worldwide. It believes ‘what gets measured gets managed’ and is deeply committed to helping clients run cost-effective operations that generate value for their stakeholders. With vast industry knowledge and a robust database spanning 28 years and $10+ trillion in AUM, CEM helps more than half of the world’s top 300 pension schemes understand and manage their costs and performance. CEM also facilitates better pension outcomes by sharing cutting edge research derived from its proprietary databases.
Top1000funds.com is the market leading news and analysis site for the world’s largest institutional investors. It focuses on leading the global investment industry to continuous improvement through case studies of best practice in governance and decision making, portfolio construction and efficient portfolio management, fees and costs, and sustainable investing. The publication pushes the industry to question whether status quo processes and behaviours to tackle risks and opportunities will be sufficient in the future, and actively campaigns for diversity, sustainability, transparency, innovation and better alignment of fees in the investment industry. Top1000funds.com is read by investment professionals in more than 40 countries.